What happens if my pension transfer is delayed?

If you’re thinking of tidying up your pension pots by transferring some or all of them, it’s a good idea to understand the process. Then, if delays happen, you’re not surprised or worried. We’ll discuss the common causes, what to keep an eye on, and what you can do if your pension transfer is delayed.

There are a few reasons that a pension transfer might be delayed:

• You’re doing an overseas transfer.
• Paperwork has gone missing.
• It’s tax year end and lots of transfers are taking place.
• Security checks and due diligence processes take time, insurers have a regulatory duty to do these checks.
• You might be required to get financial advice before you can transfer.

Delays in pension transfers can affect the overall amount of money that will go over to your new pension in the end. As your pension is invested, your money will stay that way until the transfer is ready to be completed. So, although when you initiated the transfer, your pension may have been worth £20,000, once it’s ready to go it might only be worth £19,000 because of falls in the value of your investments. On the other hand, there’s also the potential that your pension could go up in value.

Identifying red flags in pension transfers

Sadly, pension scams still exist, so making sure you’re vigilant when it comes to transfers is vital to keeping your hard-earned cash safe. Keep an eye out for red flags like:

• Too good to be true situations – If a provider is guaranteeing you returns or offering a lower retirement age, it’s usually too good to be true.
• Cold calling – If someone calls you and tries to get you to make a decision there and then, then there might be something wrong. Pension cold calls were also banned in January 2019, so it shouldn’t be happening full stop.
• Offers to unlock cash – Scammers will often offer bonus’ or some kind of reward to try and get you to move your money.

If your provider identifies something which causes concern, they may investigate further, or if they’re not satisfied the transfer is genuine, they may not allow it to go ahead.

If your transfer is delayed, contact your provider to see if there’s anything they need from you to get things moving again. If there isn’t anything more needed from you at least you’ve pushed them in the right direction. It might be that they’re waiting for the other provider to confirm that they’re ready to receive the transfer, or they’re in the middle of selling your assets which can sometimes take a few days.

Legal rights and protections for pension holders

If it gets to a point where a pension transfer hasn’t gone well, and you’ve exhausted all avenues with the pension provider themselves, you might want to contact the Financial Ombudsman Service (FOS). Any pension provider who is registered with the Financial Conduct Authority (FCA) should make you aware that you have the right to contact the FOS if you feel as though you’ve been mistreated by your provider.

If you’re putting all of your pensions into one pot it might be worth checking if your provider offers something like a consolidation service, to help make that transfer as smooth and quick as possible. If you’re not and are just moving things around, ensuring you have all of the appropriate documents ready to send to your provider, all of your personal details are up to date and ensuring that you’re ready with things like fund choices, and your percentage allocations for each, can make the transfer process quicker and get rid of a few potential bumps.